Australia\u2019s headline inflation rate has fallen by 0.4 per cent in the 12 months to last November, though a\u00a0leading economist believes future rate rises are inevitable.\u00a0<\/p>\n
Australia\u2019s CPI figures, released on Wednesday, showed inflation had been cooling, landing at a headline rate of 3.4 per cent.\u00a0\u00a0<\/p>\n
The trimmed mean inflation rate \u2013 that rate which informs the Reserve Bank\u2019s rate decisions \u2013 fell to 3.2 per cent from 3.3 per cent.\u00a0<\/p>\n
Easing inflation can stir mortgage-holders to expect interest rate holds, or even a cut, in the future.\u00a0\u00a0<\/p>\n
But Judo Bank chief economic adviser Warren Hogan feared such optimism could be ill-founded.\u00a0\u00a0<\/p>\n
He believed the economy was still running too hot for the Reserve Bank of Australia board and tipped another rate rise in February\u2019s meeting.\u00a0\u00a0<\/p>\n
\u201cThere\u2019s less than a quarter of the CPI basket that is below the RBA\u2019s target band,\u201d he told Sky News on Wednesday.\u00a0\u00a0<\/p>\n
\u201cThe reality is over the last six months the economy is improving and inflation is rising, so this rate they have is\u00a0probably not\u00a0appropriate.\u00a0<\/p>\n
\u201cI think they should raise rates in February.\u201d<\/p>\n
He said the quarterly figure, due in three\u00a0weeks’ time, would hold more clues as to what the RBA will do come\u00a0February 3.\u00a0<\/p>\n
\u201cIf that quarterly core inflation number comes in at point nine or higher, I think\u00a0they’re\u00a0going to have to raise rates in February and probably a couple of times over the first half of the year,” he said.\u00a0<\/p>\n
VanEck\u00a0deputy of investments and capital markets, Jamie\u00a0Hannah,\u00a0had a more positive message for millions of mortgage holders, forecasting they could be spared further interest rate pain in February.\u00a0<\/p>\n
\u201cHad inflation continued to move north, this\u00a0could have sealed the deal for a rate hike next month, which would be the first increase in more than two years,\u201d he told\u00a0NewsWire.\u00a0<\/p>\n
\u201cAs it stands, the positive developments from today\u2019s inflation print could be enough to keep the rate hike wolves at bay for now, but the outlook over 2026 is far from certain.\u201d<\/p>\n
Despite the falls, both figures\u00a0remain\u00a0above the Reserve Bank of Australia\u2019s target range of 2 to 3 per cent, meaning a rate cut in February is still unlikely.\u00a0<\/p>\n
Of the data announced on Wednesday,\u00a0Mr\u00a0Hogan told Sky News he believed the\u00a0housing figures\u00a0should be of utmost importance to\u00a0the government.<\/p>\n
Housing was one of the key drivers of the inflation figures, according to the Australian Bureau of Statistics, with costs rising by 5.2 per cent.\u00a0\u00a0<\/p>\n
\u201cIt’s absolutely core to where inflation goes to the housing component is one of the biggest and it also\u00a0got\u00a0a very reliable relationship with where overall inflation in the economy is,\u201d\u00a0Mr\u00a0Hogan said.\u00a0\u00a0<\/p>\n
\u201cBoth housing construction costs and rents are rising. Rents are up quite strongly, 0.4 in the month and 4 per cent over the year, and they too now are\u00a0trending up\u00a0after easing back in 2024-25.\u00a0<\/p>\n
\u201cWe’ve got everything\u00a0that’s\u00a0essential\u00a0really moving, or\u00a0they’re\u00a0the main drivers, that is food, health, education.\u201d<\/p>\n
Prior to Wednesday\u2019s announcement, economists had forecast yearly headline inflation to ease from 3.8 per cent for the 12 months until October to 3.6 per cent in November.\u00a0<\/p>\n
Federal Treasurer Jim Chalmers welcomed the new data as \u201cvery encouraging\u201d, but\u00a0warned that the economy still faced issues in\u00a02026.\u00a0<\/p>\n
\u201cThe three big economic challenges this year are inflation, productivity and global uncertainty,\u201d\u00a0Mr\u00a0Chalmers\u00a0said in a statement.\u00a0<\/p>\n
\u201cThe global economy\u00a0remains\u00a0uncertain due to the ongoing impact of trade tensions, weakness in the Chinese economy and global conflicts.\u201d\u00a0<\/p>\n
Mr\u00a0Chalmers\u00a0said inflation was \u201cstill higher than we would like\u201d.\u00a0<\/p>\n
\u201cWhile we\u2019ve made good progress on the economy together, we recognise the job is far from over because people are still under pressure.\u201d\u00a0<\/p>\n
–\u00a0With NCA NewsWire<\/p>\n","protected":false},"excerpt":{"rendered":"Australia\u2019s headline inflation rate has fallen by 0.4 per cent in the 12 months to last November, though…\n","protected":false},"author":2,"featured_media":397041,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,211625,21450,14827,164,39599,5465,21131,44,2178,19306,211426,12773],"class_list":["post-397040","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-cit","tag-cpi","tag-cut","tag-economy","tag-figure","tag-inflation","tag-mortgage","tag-news","tag-rate","tag-rise","tag-simple","tag-sky"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/397040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=397040"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/397040\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/397041"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=397040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=397040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=397040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}